LG to shutter Korean phone plant

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LG to shutter Korean phone plant

LG Electronics plans to relocate its Korean smartphone production line to Vietnam in a bid to cut costs for its money-losing mobile business, industry sources said Wednesday.

The Korean tech firm will phase out its Pyeongtaek factory, south of Seoul, by the end of this year, getting ready to shift the production line to Hai Phong, a northern Vietnamese city where other LG affiliates operate factories.

“As LG Electronics has continued to lose money from its smartphone business, it decided to move its Korean plant to Vietnam to reduce manufacturing costs,” an industry source familiar with the issue said.

LG Electronics currently manufactures smartphones in Korea, Vietnam, Brazil and China.

LG has struggled in the smartphone market for years as it has been sandwiched between Samsung Electronics and Apple in the high-end market and Chinese manufacturers in the lower-end segment.

The mobile division has been posting losses since the second quarter of 2017.

The mobile division’s annual sales reached 1.7 trillion won ($1.5 billion) last year but posted an operating deficit of 322.2 billion won due to weak sales of smartphones and increased marketing costs.

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